Understanding the real impact on everyday finances

As conversations about capping credit card interest rates continue, it's important to look beyond the headlines and understand what a 10 percent APR cap would mean for real people. While the idea sounds appealing, research shows it could unintentionally harm consumers, including many credit union members who rely on credit cards to manage everyday expenses and emergencies.

At University Credit Union, we believe in solutions that strengthen financial resiliency and affordability. However, data tells a different story about the impact of a strict cap. Federal Reserve research shows that 37 percent of Americans would struggle to cover a $400 emergency expense from income or savings alone, and more than 40 percent of those households said they would turn to a credit card to cover that cost. If a 10 percent cap were imposed, nearly 47 million subprime consumers, or about one-third of the population, could lose access to mainstream credit cards, leaving them with fewer, often riskier, options.

Consumer spending habits

The ripple effect on the economy would also be significant. Consumer spending drives roughly 70 percent of the U.S. economy, and in 2024, purchase volume on credit cards totaled $3.6 trillion, up from $2.2 trillion in 2020. That spending accounted for 12 percent of GDP. Limiting access to credit would reduce consumer spending, leading to lower retail sales and hurting businesses of all sizes.

Credit unions and credit cards 

Credit unions have a long-standing commitment to affordable financial services. As of January 2026, the average interest rate for a basic credit union credit card is 12.87% compared to banks' 16.07%. The University Credit Union Credit Card, for example, currently sits at 11.24%. Such a trend holds true across most card types, including rewards programs. 

We are proud to serve our members with fair, transparent, and affordable credit options. A 10 percent cap may sound appealing, but in practice, it would limit access to credit for millions of Americans, especially those who need it most. Nonetheless, we remain committed to working with policymakers on solutions that truly enhance financial well-being without creating unintended harm.

Healthy spending for the future

Your financial health is our priority. University Credit Union will continue to advocate for policies that protect access to affordable credit and support your ability to manage life's unexpected expenses. If you have questions about your credit options or want to learn more about how we can help, please contact us.

Credit cards serve as a vital tool in modern finance. They offer convenience and flexibility to consumers, allowing them to make purchases, manage expenses, and earn rewards. However, recent discussions around a 10 percent credit card rate cap have raised concerns. While a rate cap may seem beneficial at first glance, it could lead to unintended consequences for consumers.